A

A la criée

See Auction market

Abandonment

Allowing an option to expire unexercised. Also, withdrawal from a cancellable forward contract to purchase securities.

Accrued interest

The amount of interest accumulated between the most recent payment and the sale of a fixed-interest security. For most bonds, accrued interest must be added to the purchase price, but that amount will be recovered by the purchaser in the next interest payment.

Action

French for share.

Action de jouissance

Share which grants the right to participate in the net profit of the company without conferring ownership rights. French/Belgian term.

Action ordinaire

French ordinary share.

Action privilégiée

French for preference share.

Active fund

A fund in which the fund manager actively manages investments.

Active management

Fund managers who strive to outperform the market by identifying stocks that could produce better returns and beat the overall market (or target index).

Actuals

The physical or cash commodity, as distinguished from futures contracts.

After hours dealing

On the London Stock Exchange, dealings done after the MQP. Such dealings are treated as dealings done on the following business day. In general, trading after the hours a stock market has closed. (For all major US stock markets, after-hours trading is 16:00-18:30 Eastern Standard Time). After-hours trading often takes place after the release of news that could make the price of a stock rise or fall sharply after the close of trading. Participation in the after-hours market is strictly voluntary and may offer less liquidity and inferior prices.

After market

See Secondary market

Agency cross

A trade in which a single broker acts as the agent for both the buyer and seller. This can occur when a member firm simultaneously receives a buy and a sell order from two different customers but for the same number of shares in the same stock. When these orders reach the floor broker, he can easily cross them and complete the transaction, but only after going to the designated trading post for that stock and announcing the bid in case another broker is prepared to offer a better price.

Agency order

An order that a broker/dealer executes for the account of a customer with another professional or retail investor and for which a commission is typically charged.

Aktie

German for share.

Algorithmic trading

Trading in which buy or sell orders of a defined quantity are determined by a quantitative model that automatically generates the timing of orders and the size of orders based on goals specified by the parameters and constraints of the algorithm.

All or none (AON)

A condition that the full amount of an order to buy or sell is executed at an agreed price; a lesser amount is unacceptable.

Allotment letter

See Renouncable documents

Alpha

The Alpha is a measure of how much a stock has risen or fallen over a one-year period.

Alternative trading system (ATS)

Non-traditional, computerised trading systems that compete with or supplement dealer markets and traditional exchanges. These private trading systems; facilitate electronic trading in millions of shares of public issues every day, but do not provide a listing service. ECNs are alternative trading systems; however, not all ATSs are ECNs. (See Electronic communications network)

American Depositary Receipt (ADR)

A receipt or certificate issued by a US bank that represents a specific number of shares of foreign-based corporations held by a US banking institution in the country of origin on behalf of an investor in the US.

American option

An option which may be exercised at any time prior to expiration.

Amtlicher Handel

The official trade section of German stock exchanges.

Analyst

A person with expertise in evaluating financial investments. An analyst performs investment research and makes recommendations to institutional and retail investors to buy, sell, or hold. Most analysts specialize in a single industry or sector.

Annex I countries

Developed countries who, under the Kyoto Protocol, have accepted greenhouse gas emission reduction obligations and must submit an annual greenhouse gas inventory.

Arbitrage

The simultaneous purchase on one exchange and sale on another of the same or equivalent financial instruments in order to benefit from price or currency differentials.

Arbitrageurs

Those looking for arbitrage opportunities.

Asian option

Asian options are based on an average price of a commodity over a period of time, rather than on a single price taken at the end of a period. Asian options are currently available only OTC.

Ask price

The price at which a seller has offered to sell a security or commodity.

Association Française des Sociétés de Bourse

A professional association which advises members of the French stock exchanges and represents them to outside bodies.

At best order

An order submitted to the order book with a specified size which may execute, either in part or in its entirety, against eligible orders at the price of those orders with any unexecuted portion being rejected from the book.

At-the-market

See Market order

At-the-money

An option whose strike/exercise price is equal to or near the current price of the underlying instrument.

Auction market

A system in which financial instruments are bought and sold through trading on an exchange floor by buyers and sellers competing via open-outcry with other buyers and sellers for the best price.

Authorised share capital

The maximum number of shares that a company can issue, as specified in the firm’s articles of incorporation.

Automatic execution

An automatic trade executed by the trading system. Automatic trades are executed by matching buy and sell orders.

Avoir fiscal

A tax credit (on dividends) payable to French holders of French securities. In most cases, foreign holders are granted the avoir fiscal in accordance with tax agreements between France and their own country.

Azione

Italian for share.

Azione ordinaria

Ordinary share on Italian stock exchanges.

Azione privilegiata

Preference share on Italian stock exchanges.

Azione risparmio

Savings share on Italian stock exchanges normally issued in bearer form and enjoying privileged rights on the distribution of profits. Holders of these shares have no right to vote in shareholder meetings.